Judge Andrew Napolitano: We just finished, as you probably heard, a very lively segment with my colleague, Shepard Smith and my colleague, Trace Gallagher, which was simulcast on the Fox News channel.

There is a big uproar everywhere, as you know, over these torture memos. I have argued, as you may have heard me, that the logic behind them was highly disingenuous, that the writers of them were predisposed to authorize the government to do whatever it wanted and then I heard from Bob Bear, the former CIA agent undercover who appears in the media a lot who told me on my radio show this morning that the CIA exaggerated the need for these procedures, manipulated the Justice Department into authorizing them, and there was no second or third wave of attacks planned on the United States, but yet the CIA claimed credit for having stopped them. Does any of this, Congressman Ron Paul, surprise you?

Ron Paul: No, not really. It surprises me that maybe that Obama hasn’t been a little more aggressive. You know, I don’t think he wants to pursue it because, you know, he likes the position of defending state secret and what all that has been done here in the last administration.

But politically, he got some pressure now, so he’s saying, “Well, we’re going to look at the people who wrote these memos, but I can’t get to look at everybody; the people who participated and contributed.”

You know, if you waterboard somebody a couple hundred times, don’t you think maybe it’s suspicious and that it could be torture? You know, I think the best way to settle this dispute is not so much to change a name and just calling torture, you know, “special techniques in intelligence”.

What we need to do, if somebody thinks this is not torture, say, “Take him in, and put a screw through his fingernail and see if he thinks it’s torture now.” I think we can come up with a definition of torture rather quickly.

Judge Andrew Napolitano: I think we would, but, you know, these memoranda, I don’t want to bogged down in the legal issues and I have a lot of other things that I want to chat with you about. But the memoranda are so one-sided, they did their Orwellian best to redefine terms and to say it’s not torture unless it’s a near occasion of death.

Now, there are two problems with that. One, that doesn’t appear anywhere in any of the definitions of torture. In the United States Federal statutes, in the treaties to which we are party, even in the laws of any other countries, it just doesn’t appear anywhere else. The standard definition is any inhumane, degrading, or painful introduction without authorization by a judge, intended to demean the victim, intended to gratify the perpetrator, or intended to extract information from the victim.

Moreover, the torture memos themselves say that the doctors, the physicians hired by the CIA, told them that waterboarding is always a near occasion of death because a couple of drops too much in someone’s nose and nasal passages could result in death.

Ron Paul: You know, one thing, as almost an aside, I detest the idea that physicians get involved in this. This to me is just reprehensible and, of course, physicians got involved in things going on in Nazi Germany. And that is so anathema to what I think a physician should be all about, but this –

Judge Andrew Napolitano: Allowed to stand by and say to the torturers, “You can go a little further. You have to stop now.” Doesn’t that violate the physician’s oath of “First, do no harm.”

Ron Paul: Yes, I think they should not be involved in anything dealing with death, whether it’s abortion, electrocution, or, you know, death penalties, or this type of torture. Physicians should stay away from it. But that is a reflection of our culture, unfortunately, and that we have been conditioned to accept this.

But, you know, even if one out of a thousand people produced some information that they think is valuable, that can’t be a justification. I don’t think there is a practical benefit from this, and, yet, that’s what they’re hinging this on that the, “yes, we might get some practical benefit.”

But there’s something else that drives people. You know, under these conditions, I think we lose our humanity and some people that go off to war are very decent, complacent individuals and especially in these times. It used to be that when young men were drafted like in World War I, they had trouble shooting and killing each other. But now, when we call up our young people, they are conditioned psychologically to become killers and yet, what happens when they come home, you know, they are all messed up.

So something happens to us as a culture when we can condition our CIA agents to participate in this and not assume any responsibilities. So I think what Obama is doing is very dangerous. He’s condoning it and yet, he was asking for change and he wants this to be a technical argument, about who wrote what memo and exonerating everybody else.

But I think if you were participating in waterboarding or especially if you did it many, many times on one individual, then it’s sort of suspicious that it could be torture and hopefully this discussion would be beneficial and wake up some people.

Judge Andrew Napolitano: One last question about this unpleasant subject matter before we move on to some others. When the government discovered the abuse of prisoners at Abu Ghraib prison and that abuse consisted of putting dog collars on people and causing them to be naked and scaring them with dogs and putting them on flesh piles and trying to induce them to perform unnatural, inappropriate, immoral sexual acts, the government prosecuted a private and a sergeant.

It must have been known by people up the chain of command, and I don’t know how high up, that this behavior either would be condoned, authorized, compelled, or overlooked. If there is evidence with respect to the torture, with respect to the ten procedures used by the CIA, authorized by the Justice Department, whether authorized under false pretenses or not, if there is evidence that that knowledge was condoned by the highest of authorities, and Karl Rove told me that President Bush read these torture memos in Mr. Rove’s presence, so we know the President read them. How high up should the prosecutions go?

Ron Paul: I think all the way. Otherwise, we don’t have rule of law. Otherwise, we are protecting state secrets, you know, the idea that governments are omnipotent and I’m afraid as soon as they get in power, you know, people will run as good candidates and they’ll say one thing and when they get in there as part of the same problem. So I think this is a key issue and I think everybody should be exposed. That doesn’t mean that I know who’s guilty and who’s not.

But to say, “Well, we’re not going even to look into the matter.” I think it’s a very, very dangerous. It’s condoning it. It’s encouraging it, and if we are going to be a people who believe in the rule of law, we should pursue this and this administration shouldn’t be able to say one thing and pretend they’re [addressing the issue] and at the same time they are covering up.

Right now, I’m not convinced that these procedures are stopped. You know, they closed Abu Ghraib and they closed Guantanamo, but have they absolutely promised there would never be rendition? Morally, if we send an individual to another country and we pay them to do this, aren’t we just as guilty, maybe even more so, because we’re really hiding it from the people?

So it’s still a major problem and I think this deserves a major discussion.

Judge Andrew Napolitano: I think what we’ve seen is the tip of the iceberg. I mean, rendition is not only morally reprehensible, sending a prisoner to a country where we know he’ll be tortured, writing down what he says and then bringing him back here for prosecution or for confinement. It is also specifically prohibited by the federal criminal statute, and yet the government has done it and yet this government, President Obama says that he will do it.

Switching gears, everybody knows that the value of the dollar has gone down about 95 percent since the Fed was first introduced, first came into power in 1913. There’s never been an audit of the Fed. The Fed manipulates and destroys our economy through its infusions of cash and artificial regulation of the cost of credit.

You have introduced legislation intended to audit the Fed. You have gotten co-sponsors from all across the political spectrum; Republicans, Democrats, liberals, conservatives, individualist, libertarians. What is the chance that this will make it to the floor of the House, and will be debated and voted on favorably?

Ron Paul: Probably better than any other bill I’ve ever introduced, and this is the proper step. But maybe that’s not saying a whole lot. No, it is doing very well. After we came back yesterday from our 2-week break, I think have 15 new people signed on and somebody came up to me and says, “I signed on your bill this morning because I went to my town hall meetings, I went four of them and in every meeting people were there and say, “It’s time that we have transparency of the Fed.'”

But I call them the Fourth Branch of government. Some people don’t think of them as part of the government because they’re so secretive. But we created it, we can end it, we take no responsibility to supervise it, and look at what they’re doing. We spend hundreds of billions, but the Fed deals in trillions, and they don’t have any responsibility to tell us about it. So there’s a lot of power there and it deserves looking at.

And I think I have to say Barney Frank has been sympathetic with this. He’s for transparency. He’s not for hard money and the type of monetary policy I’m talking about. He believes that we should have more transparency of the Fed, so whether this bill gets passed or something very similar, the mood in the country is such that not only do they want us to be better in handling the appropriated fund and knowing where these TARP funds went, the American people have awakened to this whole idea of what the Federal Reserve does behind the scenes.

So I’m delighted. I’ve been pushing this monetary issue for more than 30 years believing it was THE significant economic issue of our time, and I think people are starting to realize this and we’re going to keep hearing about it and there’s a good chance that it will eventually make it to the floor.

Judge Andrew Napolitano: You were on Freedom Watch, many banks which participated in the TARP program, either voluntarily or under coercion from the Fed, I mean, we all know now that the FDIC threatened to audit banks that didn’t accept TARP funds and they all caved, some of them willingly wanted the money, some of them took the money in order to avoid the audit, not that they would fail the audit, but everyone knows how costly an audit can be in terms of the time of your employees and the value of your stock and your public image.

But many of the banks that have sought to pay the government back have run into a brick wall and it’s coming in a couple of forms. One form is, “we know you’re okay, ABC Bancorp, but we’re worried that the system isn’t okay and we need you to keep our money in your bank or to loan it out there.” Another roadblock is, “Well, let’s see, you own some Chrysler and General Motors bonds, we want you to take 15 or 20 cents on the dollar on those bonds and then we’ll think about accepting your TARP funds back.”

Question, Congressman Paul, is this not the classic definition of fascism? Private ownership and public control, and what right, if any, does the government have to say to bank management, “Do what we want or we audit you. Buy this bond back at 15 cents of what you paid for it, sell it for 15 cents on the dollar or we’ll try and control your management decisions.”

Ron Paul: Yes, this certainly is a form of fascism and once you make a bargain with the devil, you know, you get locked in. But in a way, banks and others and corporations have been involved to some degree, so I always argued that if you’re going to involve one percent at a time and nobody seems to notice it, you sacrificed a hundred percent of the principle and it leads to the kind of problems that we have.

So you take fractional reserve banking and using low interest rates by the Federal Reserve. How many times have the Federal Reserve bailed out the banks? And once you get trapped into that and using the insurance money, then you have to do their bidding because they have too much power.

So this is why I argued the case for more purity in not getting involved with the government in these programs. Even conservatives always annoy me to no end. They would concede to the liberal and say, “Well, this welfare program, I don’t believe in it, but you’ve got to help the people who need it.” And that’s only 2 or 3 percent, so they concede a hundred percent of the principle and all of the sudden, the 2 or 3 percent becomes 30 or 40 or 50 percent because problems get worse.

This is what has happened in the banking industry and I understand there are people probably honestly in the banking system that would like to not be involved and they get pushed into it. But the government will use force and threats and that’s exactly what they’re doing because some of those individuals right now want control. They want federal control and maybe they’re just arguing on who’s going to make the final decision. Will they be businessmen who have sold their souls to the government or will it be the politicians who will now set salaries and tell them which kind of cars to build.

I mean, that’s absurd and if you want to see a failure, all we have to do is to continue with this process.

Judge Andrew Napolitano: Are you, Governor Perry of Texas, and I, the only three people across the country who think that states have a right to secede from the Union, that any piece of legislation that a state legislature has enacted, that any resolution it has agreed to, it can by the ordinary course of legislation un-enact, or disagree to, and that secession is a valuable tool, used properly, to keep the federal government in check?

Ron Paul: Absolutely, and I think you’re alluding to the fact of nullification. You know, if we would have had nullification, then the states could just say, “We don’t accept that because it’s unconstitutional. It’s too big a burden.” Or if there was always that potentially the State could leave, the federal government would have treated all the states differently.

And I like to use this argument, even to appeal to the left, because you know my position on this drug war and all these laws that the federal government passes, but what do they do? They march in to California. California wants to deal with the problem their way, but our federal government comes in and said, “No, we have no respect for what the State government is doing and we’re going to overrule”, so the left ought to realize this as well that the states ought to have a little more authority. But as soon as you’re talking about states’ rights, they want to paint you in the corner and saying that you’re some type of a radical who wants to go back to slave days and things like that.

But the principle is very sound. It was well known, it was accepted by the Founders. The first group of people’s states that want to talk about it were the people in New England and I think another good analogy is that most Americans who responded to, you know, we belong to the United Nations. Twenty-five percent of the people want out of the United Nations, but the majority still wants in.

But I bet the very large majority, if not practically a hundred percent of Americans would say that we have a right to get out of the UN if we don’t like it. We pay most of the bills, as did the South, you know, before the Civil War. They paid most of the bills. If we pay too much of the bills and they outnumber us, which they do, that’s why we are not attending some of these conferences because we don’t have the votes, even though we pay the bills.

So I think most Americans would say, “Sure, we can leave the UN.” That’s a type of secession and of course, we were proud to support the secession of all the republics around the Soviet Union when the Soviet Union broke up. The principle, as you point out, is a very important principle and sadly it was lost because of the Civil War.

Judge Andrew Napolitano: So it still remains in the Declaration of Independence, which is still part of the Federal law that the Congress has enacted. When the central government loses it responsiveness to the people, when it fails to protect freedom, when it violates natural rights, it is the duty of the people to alter and abolish it. How much more time do we have? Okay, we have about four more minutes.

Ron Paul: Okay, let me just add one thing, if I can. You know, it’s interesting that they accuse some of us who might suggest that we accept this principle. They say that we actually are committing treason and we’re un-American.

Well, when you think about it. I mean it’s the most American principle alive. I mean, if we wouldn’t have America we didn’t believe in this principle of secession.

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